Stocks Falling Substantially into Final Hour on Rising Long-Term Rates, Escalating Tariff Uncertainty, Earnings Outlook Jitters, Tech/Transport Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.21 +3.2%
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .20 -1.0 basis point
• BofA Global Financial Stress Indicator -.22 +3.0 basis points
• European Financial Sector CDS Index 55.4 +.8%
• Emerging Market CDS Index 129.7 +1.9%
• Bloomberg Global Trade Policy Uncertainty Index 3.9 +1.2

• Citi US Economic Surprise Index 18.3 +3.7 points

• Citi Eurozone Economic Surprise Index 20.6 -2.6 points

• Citi Emerging Markets Economic Surprise Index 20.5 -3.6 points 
• S&P 500 Current Quarter EPS Growth Rate YoY(37 of 500 reporting) +16.7% -.9 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 313.38 +1.05:  Growth Rate +16.4% +.4 percentage point, P/E 21.9 -.4
• S&P 500 Current Year Estimated Profit Margin 13.21% -5.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a +n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 491.56 +1.55: Growth Rate +19.6% +.3 percentage point, P/E 31.0 -1.1
• Bloomberg US Financial Conditions Index .57 -18.0 basis points
• US Yield Curve 69.5 basis points (2s/10s) +6.25 basis points 
• Bloomberg Industrial Metal Index 168.1 -.6% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 25.1% -1.8 percentage points
• US Atlanta Fed GDPNow Q4 Forecast +5.3% unch.
• US 10-Year T-Note Yield 4.29% +6.0 basis points
• 1-Year TIPS Spread 2.81 +3.0 basis points

• Highest target rate probability for March 18th FOMC meeting: 76.6% (-2.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 62.3%(-3.5 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -680 open in Japan 
• China A50 Futures: Indicating -80 open in China

• DAX Futures: Indicating -12 open in Germany

Portfolio:

• Lower: On losses in my tech/financial/industrial/consumer discretionary sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -2.2%

Sector Underperformers:

• 1) Computer Services -3.6% 2) Road & Rail -3.0% 3) Gambling -2.8%

Stocks Falling on Unusual Volume: 

• WST, DPZ, EVMD, SRAD, CEG, IR, MESO, NPB, FAST, MS, LIF, TSM, UNP, OTEX, WIX, AZN, NTNX, TRMB, IBN, LOGI, TWO, PFSI, FIG, RDW, VITL, VELO, CRML, ADUR, MMM, IOT, GLOB, RUN, NTAP, MUR, AVAV and BKKT

Stocks With Unusual Put Option Activity:

• 1) WEN 2) AQST 3) GFS 4) IBRX 5) MMM

Stocks With Most Negative News Mentions:

• 1) BTGR 2) NTAP 3) STUB 4) CRWV 5) MMM

Sector ETFs With Most Negative Money Flow:

• 1) AIRR 2) SMH 3) VAW 4) XLI 5) IXN

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth -.8%

Sector Outperformers:

• 1) Gold & Silver +4.3% 2) Foods +1.1% 3) Coal +.7%

Stocks Rising on Unusual Volume:

• CRVS, RAPT, ACHC, QGEN, HYMC, UMC, KEP, VOR, AMLX, ORLA, IAG, DFTX, CGAU, SKM, LPTH, ONDS, SGML, SVM, MRAM, LITE, UUUU, SNDK, EQX, USAR, HBM, AU, BVN, ELVA, GRAL, FULC, RCAT, KGC, VIA, OR, SA, TYRA, GFI, EXK, EGO, ARMN, SSRM, PZZA, MUX, BRZE, IDCC, SSRM, AAUC, AEM, PSLV, NEXA, AUGO, PAAS, IDR, ACLX, MAZE, METC, LQDA, GFS, WPM, CMPO, LQDA, ALB, AXSM, EXE, SKYT, AGI, CEF, VIV, STZ, XP, PHYS, SKYT, VICR, NTLA, FNV, SBS, DNTH, LASR, HL, BSX, ERO, NU, BIOA and EC

Stocks With Unusual Call Option Activity:

• 1) BSX 2) MGNI 3) CRVS 4) EH 5) CHGG 

Stocks With Most Positive News Mentions:

• 1) RAPT 2) ARDX 3) RMTI 4) IBRX 5) SNDK

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XBI 3) COPX 4) CIBR 5) XHB

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (ALLY)/1.02
• (BKU)/.89
• (SCHW)/1.39
• (CFG)/1.10
• (HAL)/.55
• (JNJ)/2.47
• (TEL)/2.54
• (TDY)/5.84
• (TRV)/8.76
• (TFC)/1.09 

After the Close: 

• (CACI)/6.48
• (KMI)/.36
• (KNX)/.35
• (PNFP)/2.26 

Economic Release 

10:00 am EST

• Census releases Sept.-Oct. Construction Spending report. 
• Pending Home Sales MoM for Dec. is estimated unch. versus a +3.3% gain in Nov. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The President's WEF speech, 20Y T-Bond auction, Atlanta Fed GDPNow Q4 update, weekly US retail sales reports, IEA monthly report, weekly MBA mortgage applications report, SPIE Photonics West Expo, (AYI) annual meeting and the (SCHW) business update call could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +15.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.3 -3.4
• 10 Sectors Declining, 1 Sector Rising
• 25.8% of Issues Advancing, 72.7% Declining 
• TRIN/Arms .50 -49.0%
• Non-Block Money Flow -$289.1M
  
• 93 New 52-Week Highs, 51 New Lows
• 68.3% (-3.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 60.9 -4.5

Polymarket:

• Supreme Court Rules in Favor of Trump's Tariffs? 31.0% -1.0 percentage point
• Will there be another US government shutdown by January 31st? 12.0% -17.0 percentage points
• Will China invade Taiwan by end of 2026? 13.0% -1.0 percentage point
• US strikes Iran by June 30th 54.0% +5.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 101.1 +.6%
• US High-Yield Tech Sector OAS Index 414.25 +9.75 basis points
• Bloomberg Cyclicals/Defensives Index 262.6 -.7%
• Morgan Stanley Growth vs Value Index 157.1 +.1%
• CNN Fear & Greed Index 53.0 (Moved to NEUTRAL from GREED) -9.0
• 1-Day Vix 12.1 -1.8%
  
• Vix 19.2 +1.7%
  
• Total Put/Call .84 unch.

Tuesday Watch

Around X:

• @Business   

• China doesn’t hold the solution for Canada’s economic issues and isn’t a trustworthy partner, Taiwan’s top representative to Ottawa said following Prime Minister Mark Carney’s tariff deal with Xi Jinping.
• Armed bandits kidnapped more than 170 worshippers from two churches in Nigeria’s Kaduna state, the Daily Trust newspaper reported, citing witnesses.
• Top Iranian officials called for “leniency and compassion” for some of the protesters arrested during the latest wave of unrest, despite a pledge from the police to continue cracking down on dissenters. 
• Treasuries joined a selloff in global bonds on Tuesday as escalating trade tensions spurred by proposed US tariffs relating to Greenland undermined demand for American assets.
• Federal Reserve Chair Jerome Powell plans to attend Wednesday’s Supreme Court hearing over the attempted dismissal of Fed Governor Lisa Cook by President Donald Trump, according to a person familiar with the situation. 
• Big Tech's thirst for electricity is now embroiled in the politics of affordability. What's needed is a "bring your own generation" mechanism for hyperscalers. 
• Unusually cold conditions are forecast to linger across northeastern and central Europe through early February, boosting heating demand and testing volatile gas markets. 
• Silver hit a record and gold traded just below an all-time high.
• The New York Stock Exchange is building a venue using blockchain technology to allow for trading tokenized stocks and exchange-traded funds around the clock. 
• Get up to speed on what's moving global markets.
• Here's what you need to know to start your day.

• @Zerohedge

• Socialism Is A Noun - A Synonym For Socialism Is Theft.
• Ladies and Gentlemen, I present to you the last 4 days of social media posts from the United States senator who allegedly represents the people of South Carolina. (video)
• Why California Is Bleeding Tech Jobs: Decline Is A Policy Choice.
• Will Trump's Efforts To Help Affordability Work: Morgan Stanley Explains.
• *JAPAN 40-YEAR BOND YIELD HITS 4% FOR 1ST TIME SINCE 2007 DEBUT.
• 'We Must Pass The SAVE Act': Republicans Engage In Serious Push For Voter ID.
• First Victims Of 'Great Memory Crunch' Emerge As Data Centers Soak Up Global Supply.
• Newsom Strains To Flip Script On California's Failures.
• Protesting is actually about petitioning the government for a redress of grievances. The word for traumatizing kids at church to effect political ends is "terrorism." (video)   
• Minneapolis Police Face Mass Exodus As New Paid Leave Program Hits Amid Riots.
• How Trump's Greenland Tariffs Would Impact European Economies.
• Happening Now: Largest Solar Storm In Two Decades Pounding Earth.
• Bayer Shares Surge After Supreme Court To Hear Roundup Appeal; Is The Decade-Long Bear Market Over? 
• She just…posted everyone involved. And then PINNED it to her profile. Incredible. (pic)
• Goldman Delta-One Desk-Head Expects 'Last Minute Compromise' By Trump Over Greenland.
• Top Overnight News. US President Trump hit 8 European countries with a 10% tariff, effective February 1st, over Greenland. The 8 countries include Denmark, Norway, Sweden, France, Germany, Finland, the Netherlands and the UK. The tariff will be increased to 25% on June 1st, unless a deal is reached for the purchase of Greenland.  

• @CNBC

• China keeps benchmark lending rates unchanged despite slowing economic growth.
• Asia-Pacific markets set for subdued open as Trump-EU tensions keep investors jittery. 
• OpenAI to focus on 'practical adoption' in 2026, says finance chief Sarah Friar.
• These stocks are leading 'meaningful breakthroughs' in quantum computing, UBS says.
• Here are the European exporters most exposed if Trump’s Greenland tariffs kick in.  
• CNBC Daily Open: The EU has a nuclear option to deal with Trump's Greenland tariffs — and is mulling over it.  

• @GenFlynn

• All Americans need to hear this message. This is a cry of anguish. As Americans, we have a moral duty to do the right things for those whose innocence was lost far to soon for the wrong reasons. “Eli, Eli, lema sabachthani?” (video)
• This is one of the quiet heroes of this administration. @DNIGabbard has done more to expose two critical issues toward moving America forward over the long haul. Her and her team have identified: 1. Massive election fraud that has occurred in U.S. elections for potentially decades and specifically in the 2020 election and, 2. Those who conspired to overthrow the United States of America. Now we MUST see accountability for both. (video)
• Every pastor, priest, minister and rabbi nationwide ought to speak up about the outrageous actions of the uncontrolled mob led by media activist, Don Lemon, in a church today. It was such a dangerous act and could have led to a disaster were it not for a calm congregation and a decent pastor who was simply trying to hold a Sunday worship service to pray to God Almighty (but maybe that was this mobs intent—attack God). Wake up America and stand up for our Christian heritage and values as well as our rights before it is too late. (video)
• What I do know is that our @POTUS @realDonaldTrump is deadly serious about election fraud in the rigged 2020 elections. This is coming to a head. He knows he must act w/ or w/out the justice department coming to any conclusions. He understands if he doesn’t, he places the nation at grave risk and his legacy will be tarnished forever. (video) 

• @TheSCIF

• PASS the SAVE ACT, require photo ID and proof of citizenship, or NO vote for you. This is a huge step in restoring election integrity. If we do not fix our elections NOW, and we lose the next presidential election, they will make sure they NEVER lose again. (video)
• President Trump tried to tell you about China's ties to our elections and that Biden's FBI asked intelligence agencies to destroy intel on the alleged China plot to aid Joe Biden in the 2020. From the whistleblowers exposing a Chinese ballot printing company, to Tina Peters finding and preserving proof of election and voter fraud, it was all out in the open. Fake IDs and ballots are just ONE piece and method to rigging an election. Dominion Voting Systems alone is a Canadian owned company with global subsidiaries and registered to a company in Hunan, China. It is owned by Staple Street Capital, which is owned by UBS Securities LLC, of which 3 out of 7 of their board members are Chinese nationals with CCP ties. The Dominion software is licensed from Smartmatic which is a Venezuelan owned and controlled company. Dominion Server locations are in Serbia, Canada, the U.S., Spain, and Germany. 

• @DerrickEvans4WV

• Italy’s PM Meloni announces that President Trump was open to dialogue on Greenland — but Europe sent mixed signals that looked anti-American. She warns the real threat isn’t the U.S., but other global actors watching closely. (video)

• @laralogan

• BREAKING: Thousands of ICE Agents DOXXED Online – Extremist Activists Aiming at Their Families! Whistleblower leaked personal info on ~4,500 ICE & Border Patrol agents to anti-ICE sites. Protesters now showing up at homes, harassing spouses & kids. Lives at serious risk. THIS is exactly why agents wear masks. Democrats, take note. -@officer_Lew. Protests reportedly now at the homes of Ice agents? How far will the Trump administration let this go? What does it take? (video)

• @EndWokeness

• BREAKING: Anti-ICE mob storms church in St. Paul, MN and shuts service down. The line is beyond crossed. Insurrection Act. Now.

• @lsferguson Report: 

• Republican Senate Majority Leader John Thune tried to talk President Trump out of endorsing against Bill Cassidy to no avail Cassidy voted to impeach Trump and has been very critical of RFK Jr Thune was in Baton Rouge campaigning for Cassidy last week. Thune is actively slow walking and obstructing President Trump.

• @data_republican

• So @LeaderJohnThune says he doesn't have enough votes to pass the SAVE Act. I want to know which Republicans are voting against it and why! Had anyone heard a plausible explanation? Put it up for a vote so we know exactly where each of them stand on this issue! I don't know how to organize a march, but maybe we need to show up in DC? I can't think of anything else we can do.

• @GuntherEagleman

• MELT THE PHONE LINE!!! (202) 224-3121. @LeaderJohnThune and the @SenateGOP are facing a PIVOTAL moment, they have a chance to WIN for the American people. Tell them to NUKE THE FILIBUSTER and PASS THE SAVE ACT.
• BREAKING: Mike Lee just EXPOSED how the Senate could be DOING MORE to deliver on Trump’s agenda! “There are OTHER WAYS of getting to a FINAL VOTE… all you have to do is KEEP DEBATING until nobody debates.” Why are they CONSTANTLY on vacation over doing what they’ve been ELECTED to do? NUKE THE FILIBUSTER AND DO YOUR JOB! (video) 
• “ShE JuSt WaNtEd to FleE!” This is why! (video)

• @ElonMusk

• If we've learned anything over the last few years, it's that securing our elections is crucial. I’m leading the SAVE Act with my good friend, @BasedMikeLee, to make sure only U.S. citizens get to vote in our elections. This is common sense. -@SenRickScott. America will die without secure elections.
• Wait, 56 people died under ICE during the Obama admin?? Was I living under a rock? Cause I don't recall any riots over that back then... Great points. (video)

• @KatKanada_TM

• Q: Hey Grok, Does China's EV market have anything to do with Carney's investment firm Brookfield? A: Yes, Brookfield Asset Management has connections to China's EV market, primarily through partnerships with Chinese companies involved in battery technology and renewable energy components that support EVs. The most direct link is Brookfield's 2023 memorandum of understanding (MoU) with Shanghai-based Envision Group, a major Chinese renewable energy...

• @amuse

• MIDTERMS: 21 Indiana Republicans killed a clean redistricting map after promises of cash from the Senate President Rodric Bray and GOP consultants. Democrats win, Trump gets stabbed in the back.

• @JimFergusonUK

• THIS WAS AN ATTEMPTED MURDER! After being beaten unconscious by a Democrat-aligned mob, Jake Lang was dragged back into the crowd — and STABBED. Read that again. They didn’t stop when he was down. They didn’t walk away. They tried to kill him. This is what happens when politicians demonize law enforcement, excuse mob violence, and label Americans as “the enemy” for their beliefs. This wasn’t a protest. This wasn’t chaos. This was targeted political violence. And the silence from Democrat leaders is deafening. (video)

• @FFT1776

• ICYMI - John Solomon just exposed a serious DOJ failure and it lands squarely on Pam Bondi. This is bad! Finally … someone is speaking out! Bondi is months behind reality, repackaging six-month-old evidence as if it’s breaking news. As Solomon said plainly: “If you want perp walks, Kash Patel already has the evidence. Prosecutors are lagging far behind.” Translation: The DOJ is the problem! Congress and DOJ are saying privately Pam Bondi can’t get the job done! REPLACE BONDI! (video)

• @thomasbsauer

• The staffers who pick up the phone actually track this stuff. Call John Thune's office. It moves the needle. (phone/fax numbers) 

• @EricLDaugh

• HOLY SMOKES. Sec. Scott Bessent just EXPOSED Denmark's treatment of Greenland in front of millions! "Denmark has a TERRIBLE history with Greenland. There was FORCED sterilization until the 80s and 90s! All of a sudden, now that the US expressed an interest, there's this new interest from them?!" Nailed it. Europe does not care about Greenland or have the capability to defend it. Only America does. (video)
• BREAKING: Four MS-13 illegal aliens have been arrested in Maryland after they hacked a 14-year-old boy to death with a machete. Brought to you by Maryland Sen. CHRIS VAN HOLLEN, margarita-enjoyer with MS-13 Abrego Garcia. HE SHOULD RESIGN. (video)

• @BennyJohnson

• Stop what you’re doing and look at this. A Christian pastor is trying to preach the Word of God to his Minnesota congregation. Don Lemon storms the church, rushes the altar in the middle of the sermon, harasses and threatens the pastor on a live feed then further incites a left wing mob against the Christians worshipping. This is not just an obscene violation of the FACE Act — it’s likely a hate crime. Don Lemon needs to be dealt with like the Biden Regime treated Pro-Life protesters. FBI SWAT teams raids, frog marched before the cameras, full federal charges with decades of prison time. Make an example of Don Lemon. Do it now. Otherwise this will happen at every church in America. This is the only way to protect Christianity. Defend the Faith.

• @mitchellvii

• If you're wondering why John Thune doesn't eliminate the filibuster, I'll tell you. John Thune, Mitch McConnell and their globalist friends in the Senate who love that big corporate money truly hate President, Trump and MAGA. We are a existential threat to their globalist dreams. They want MAGA done and gone. If Thune eliminates the filibuster, they know that Trump will win the House and Senate, the last two years of his presidency will be wildly successful and Vance will win in 2028. And that my friends is why John Thune won't eliminate the filibuster. They want to end MAGA as much as the Democrats do.

• @Tablesalt13

• NEW. The agency responsible for investigating Chinese Police stations in Canada is the RCMP..! ...who just signed an MOU with the People's Police of China for enforcement cooperation. (video)

• @dom_lucre

• BREAKING: Miami police are now flagging residents Facebook posts and sending police to their homes to intimidate them for talking badly about the mayor. We never thought this would be possible in America. (video)

• @davidkurten

• The World Economic Forum begins today when globalist gangsters fly to Davos on their private jets to eat wagyu steak together in five star hotels, while making plans for everyone else to ride bicycles, eat insects and live in pods.

• @AlexEpstein

• Even BlackRock CEO Larry Fink now admits that “transitioning” to solar and wind will cause a global power shortage—after spending years pressuring companies to do exactly that. The "transition" he advanced has already sabotaged our power supply and raised our electricity bills. (video)

• @OcrazioCornPop

• NEW: Trump has ENDORSED Julia Letlow for Senate in race against incumbent Senator Bill Cassidy (Louisiana). WHY ARE RINOs BEING ENDORSED TO REPLACE RINOs IN RED STATES?

• @SteveAustinWI

• I didn’t really want to watch this video but finally viewed it all just now. We really need to require our liberal friends and relatives to view it. It’s so terrible. (video)

• @SidneyPowell1

• No you are not @GregAbbott_TX!!! Tarrant County is padding its voter rolls by the day. Dallas County hired a known Smartmatic guy who ran corrupt elections in the Philippines. Obstacles have been thrown up everywhere to hand-counting. You still use machines which are or can be rigged.

Night Trading

• Asian indices are -.75% to -.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 66.25 +1.5 basis points.
• China Sovereign CDS 43.5 +2.5 basis points.
• China Iron Ore Spot 103.75 USD/Metric Tonne -.9%.
• Gold 4,672.6 USD/t oz. +1.7% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.73 +.03%. 
  
• Bloomberg Emerging Markets Currency Index 36.09 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 101.1 +.5%.
• US 10-Year Yield 4.25% +3.0 basis points. 
• Japan 30-Year Yield 3.70% +9.0 basis points. 
• Volatility Index(VIX) futures 18.2 +4.3%. 
• Euro Stoxx 50 futures -.12%.
• S&P 500 futures -.95%.
• NASDAQ 100 futures -1.1%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the week.